One of the hardest things to do if you have a service-based business is to figure out what your fees should be. You have to realize that there are two types of value. One is economic based and one is perceived value. What you want to focus on when creating your pricing is the perceived value you offer to individuals.
Boost Your Perceived Value
You can boost your perceived value by becoming an expert in your niche and a go-to person for advice about your industry. You can do this by writing a book, blogging regularly, getting interviewed, giving interviews, going to live events and online events, hosting and attending and presenting at webinars, and more.
In other words, the more visible you are, the more people will want to use you. And the more people want to use you, the more your value due to supply and demand.
Your Time Is Worth More
Most people start their pricing with an hourly rate commensurate with what others in their industry are charging. This is a good way to start. But it’s just a start. Do some research to find out what others are charging for the same service, then determine the value they deliver for the cost. Figure out ways to fill in the gaps in the services the others offer, which can boost your value tremendously.
Demand Affects Your Value
If you’re not yet in demand, it’s harder to stick to a higher price for your services. But, you want to create a perceived demand for your time by avoiding focusing on that right now. Instead, focus on building your business by filling in the gaps with other services that don’t take as much of your time, making anything involving one-on-one time your high priced item.
Experience Affects Your Value
If you’ve been in business for 20 years and have numerous connections to the industry, you’re simply going to be able to command a much higher fee. But remember, your clients get a lot more for their fee today than they did when you started, so it’s worth it.
The Problems You Solve
These really affect your fees, because it matters what the solution is worth to your buyer. If your service helps your client earn multiple six figures, what percentage have you earned of that? Surely, if your help turns a $50K business into a $250K business, you’re worth 10 percent of that, right? That’s $20K from one client, which on a monthly basis would be worth $1667 a month. What can you offer to them that will be worth that?
A lot of people fail with this part of the process. If you can’t communicate your value, it’ll be hard for you to justify your price. Incidentally, this works with information products, courses, coaching, and one-on-one services too. You need to be able to communicate how much in real dollars you’re worth, and why, to your potential clients.
When you create your offer funnel it should include products, services, and help to everyone in every stage of the buying cycle, with the idea to push them all toward your most expensive one-on-one services. You can do that by segmenting your leads based on their behavior. Qualifying each potential client before you make your offer is imperative.
So many people go into business with an employee mindset. Start thinking about the value you offer to your customers, and how you can improve that value. The more value you can offer and the more value you can prove that you offer, the more people will be willing to pay you happily. Wouldn’t you pay someone $10K today if you knew for a fact that if you did everything they said you’d make $250K from that investment?